The Bankwatch

Tracking the consumer evolution of financial services

Archive for the ‘Customer experience’ Category

Alfa follows a good internet media strategy | Russia

Daniel notes good practices in managmenent of a merger using web media.

Alfa follows a good internet media strategy – covering its merger with Kazna | Retail Banking in Russia

An absolute majority of posts at this blog deals with operational aspects of banks business – but recent coverage of Alfa-Bank and Severnaya Kazna merger gives good examples on how a Web-media strategy of a bank can be formulated to better suit the wavering clients of the banks, and convey a positive image of banks in merger.

Written by Colin Henderson

August 18, 2009 at 14:53

Posted in Customer experience

Tagged with ,

All banks have the same strategy | what happened to the Starbucks strategy?

It was refreshing to read this piece, and takes us exactly where innovation in financial services ought to be going – the new (old) grand ideas.

Starbucks should start banking | FT

What if Starbucks opened an online-only retail bank offering competitive deposit rates and a modest range of loans and mortgages? It could do that by partnering with a finance company such as ING, which has the appropriate banking licences.

All it would need to do is install ATM machines in its outlets, which would involve investing some money but would allow it to get more out of its existing branches.

National supermarkets in the UK, such as Sainsbury and Tesco, have opened retail banks and placed ATM machines in their branches, but there is no national grocery chain in the US with a comparable reach. Even Wal-Mart lacks outlets on most urban high streets.

I recall the brainstorming sessions in the 90’s at the bank, where the discussion about competition arose not from other banks but from:

  • Starbucks levering their distribution and cards as a bank
  • ebay or Amazon offerring a credit card
  • internet only banks – ING was on the horizon – mbanx and Wingspan already out there
  • whether to join the S1 online banking commoditised platform
  • offer an All in One account that pulled together lending and deposits into one account
  • how to deal with the role of aggregation- offer it, join it, or ignore it
  • bill presentment – same idea – offer, join or ignore
  • shift in business model from generalist to:
    • product (manufacturer) – offer loans and deposts through others channels
    • distribution (channel) – sell products & services of others – Open Finance (Forrester)
    • segmentation (customer type)  – focus on a niche market, although most interpreted as the generalist, all things to all market which is where most banks ended

Relevance to Bankwatch:

The problem today is that Banks are on strategy defined 6 – 8 years ago to bricks and clicks, focussed on customer retention and wallet growth.  Customer Relationship Management (CRM) became the strategy de jour.  Who would claim that has worked?  Seibel disappeared inside Oracle for a reason.

Banks are all on the same strategy, focussed on mortgage as the entree, and upsell with other services later.

There is nothing out there that aims at shifting the balance of share of market in a substantial way.  This is not about acquisition or mergers – we have done that, and “too big too fail” is too fixated in everyone’s radar now, or until capitalisation is fixed, in any event.

No, this is about business model shifts … shifts that would have a target of:

  • double digit percentage shift in share of payments,
  • extraction of share of deposits and payments from an existing industry (the Starbucks example),
  • exponential elimination of costs relative to competition
  • focus on what your are good at and eliminate the stuff you are not good at

Business models –

Mr Bank Chairman …  what is your business model, and how is it different than the competition?

Supplementary question –

Who is your competition?  Do you lost sleep over Citibank and Wells, or Tempo and Wesabe?  Does your answer worry you?

PS …  as I finish this post the most telling thing is something I have become acutely aware of.  The blog categories I set up 5 years ago no longer apply, until I do a retrospective post such as this.  Either those were really bad ideas, or ideas yet to come.

RBC speak about convergence for EBPP and statements

The commentary here from Colin McKay, vice-president of e-business architecture RBC in this video interview, is refreshing to hear from a Bank.

RBC discusses client reporting and customer statements | IT World Canada

Some notes from the interview, then commentary and discussion:

  • Old process had product and IT groups generating 18 separate statements in different formats but most ending up in print
  • each statement feed was formatted specific to the output, eg, print or web
  • each of the 18 had their own processes
  • all 18 feeds have been directed to a common store, and stored as raw data
  • the 18 raw data feeds from the core systems, are now amalgamated into a “Common Composition Engine” (CCE)
  • CCE can output in any format to print, web
  • most customers do not read statements, so the current practise of storing all in PDF format is wasteful and inefficient
  • CCE will eventually be offerred on demand, and on request, this could be PDF on demand, or web on demand
  • the Customer Preference Engine will allow customers to aggregate the data of their choice, including marketing messages,and product messages into a customised statement in the format of their choice
  • uses Telephone companies as an example of information display versus statement format.  The notion of a statement is being challenged by the web experience, and is redundant for many customers
  • He speaks of Electronic Bill Payment and Presentment (EBPP) and social networks.  “people go into town and do multiple things, vist grocery store, hardware store, and the bank;  there is a desire to conduct multiple business transactions at social networks in the same way;  what we are seeing is a convergence”

Relevance to Bankwatch:

Great interview but that last point needs some discussion.  But first with regard to the problems of multiple products and statements, the solution to the problems all banks face is clear, and he articulates it well.  The notion of on demand and in the format and design by the customer makes sense.

The notion of a social network as being analogous to “going into town to conduct business” requires some thought though.  In the real world we have Wal-Mart with photo, bank, restaurant as well as their core service of merchandise.  We have malls, with a variety of stores and banks.  We have Main St with a variety of stores and banks.  Finally we have other cities and countries that we can visit to conduct transactions.  The nice thing about the web is that it can be all or any of those.   It seems to me if we use this analogy, that the town is the web, and the concept of malls, stores, banks, and big box stores are all sites within the web, exemplified as different types of aggregation or not.  An we can get to that web using laptops, PC’s or mobile.

Customers will gravitate to the methodology of their choice, but they will require help to visualise how that future might look.  There is scant evidence that Facebook is viewed by users as that place for convergence and aggregation, or the place where they go into town to “conduct business transactions”.

In fact the evidence suggests that people are avoiding those things that get in the way of their social interaction at Facebook.  My own observation is that the jury remains out as to a desire for people to aggregate financial information anywahere except with their FI.  I know this contradicts the general movements of convergence and aggregation on the web, but so far financial services have not been pulled that way by people, which is probably dirven by privacy, security, and identity theft concerns.

Having said that it is possible if RBC display how that might work in a safe secure and convenient and non-intusive manner, that customers will accept receiving their bills and reminders inside their Social Network environment, alongside their social conversations (but obviously hidden from the view of others).  Or is this more of a channel need?  Aggregation at the device level, ie PC, mobile?  In any event its a great conversation and the rioght conversation that RBC are promoting here.

Thoughts?  Do you want to receive your statements, bills and notifications elsewhere than say at the bank site, and in your email?  If so where and how?

Written by Colin Henderson

April 15, 2009 at 11:06

Bank of America making more significant moves in social media

As noted on the BofA Future Banking blog, they are now also seeking out customers, or others needing assistance on twitter.  This is consequential stuff for a Bank.  Here are a few sample twits.  User names masked here.  Clearly something has taken hold at BofA that is setting them apart from most others, and moving them into Wells Fargo territory.  Interesting stuff, and other Banks take note.

Bank of America on twitter

@_______ Can you send me a DM with your contact information? I’ll give you a call to see what we can do. Thanks!”

Lock yesterday at 1:25 pm – Comment HideMore
“@________ I work for B of A, were you able to get it resolved? Anything I can do to help?”

Written by Colin Henderson

January 15, 2009 at 16:44

Gen Y – change the generation, or change the strategy – which approach is most likely to succeed

I have long stated that understanding and building for Gen Y is an essential basic approach for online banking applications, and I refer you back to this post from 2 1/2 years ago which noted the view of Charlene Li while she was still at Forrester.

Today I was pleased ot find this site that is written by a Gen Y’r and snf focusses on Gen Y at work.  It is insightful. and much to learn from here.

Relevance to Bankwatch:

Many of the views will challenge existing thinking and help to force that ultimate question – do we try to  change the generation, or do we change the strategy.

Supplemental question – which approach is most likely to succeed?

Written by Colin Henderson

January 12, 2009 at 11:47

A hero for the information age | we are all William Tyndale

Further evidence in support of the changing times we face, and that they are nothing new – epochal change happens relatively often – just at periods far enough apart that we don’t remember. The Economist picks up on a ‘radical’ from ….

A hero for the information age – Subversion, espionage and a man who gave his life to disseminate the Word | The Economist

But the country’s masters face a dilemma: the very technology, communications and knowhow that are boosting national fortunes also threaten to undermine the old power structure.

… not China today they say, but London in 1523.

The context was that of a society where the dominant book was the bible, and the idea of anything else being written down, and read by people was subversive and revolutionary. This was a time when books and pamphlets were appearing, and being destroyed.

In October 1526 William Tyndale’s English translation of the New Testament was burned in London by Cuthbert Tunstal, Bishop of London. [Wikipedia]

The point of the Economist piece is that it is wrong for practices in China and other oppressive countries where Internet and new technologies are suppressed – wrong and also doomed to eventual failure. I would add in those industries that are not re-inventing itself at this time.

Book burners are all around us today – yet we are all William Tyndale.


Here are the key sections of what is a long and wonderful piece.

AN EMERGING nation looks increasingly confident as a player on the world stage, thanks to a mixture of commercial prowess and deft diplomacy. In its capital and in coastal cities, you can feel the excitement as small manufacturers, retailers and middlemen find new partners across the sea. But the country’s masters face a dilemma: the very technology, communications and knowhow that are boosting national fortunes also threaten to undermine the old power structure.

China in the 21st century, contemplating the pros and cons of the internet? No, Tudor England, at the time when a gifted, impulsive young man called William Tyndale arrived in London—not to make his fortune, but to transform the relationship between ordinary people and the written word. As he soon discovered, London in 1523 was a city where ideas as well as goods were being disseminated at a pace that frightened the authorities, triggering waves of book-burning and repression.

As a side effect of close commercial ties with northern Europe, England was being flooded with the writings of a renegade German monk called Martin Luther, who had openly defied the Pope and insisted on a new reading of the Bible which challenged some of the Catholic church’s long-established dogmas.

In some ways, Tyndale was poorly equipped to survive, let alone thrive, in this feverish atmosphere. He was no wheeler-dealer; more of an idealistic scholar whose linguistic gifts were so remarkable, and hence so subversive, that he was drawn into high religious politics.

Written by Colin Henderson

December 18, 2008 at 16:06

NCR experiments with Microsoft Surface for branches | Finextra

While this feels a little bit like a solution chasing a problem, its nice to see some experimentation happening.  In particular the interaction between the customers phone and the employee desktop is interesting. 

NCR taps Microsoft Surface technology for branch transactions | Finextra

Mark Grossi, VP, advanced development, NCR, says: "NCR knows that our bank customers want faster and easier ways to conduct transactions. This prototype demonstrates how assisted service technology will continue to enhance interactions between banks and their customers."

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Written by Colin Henderson

November 19, 2008 at 23:20

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